Listen: The Essential Podcast, Episode 97: The Essential Podcast, Episode 97: Looking Ahead to CERAweek with Atul Arya

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Nathan Hunt

This is the Essential Podcast from S&P Global. My name is Nathan Hunt. At S&P Global, this is a busy season. Many of our executives have just returned from the World Economic Forum in Davos, Switzerland, where they were sharing some of our projections for the year ahead.

Now just as we might be hoping to recover from the big push for Davos, we have to ramp up presentations for CERAWeek. Many of our listeners are probably familiar with the WEF meetings in Davos, but perhaps fewer of you know about CERAWeek. This is a pity because CERAWeek is the highest profile energy conference in the world. Some call it the Oscars of Energy, which is a bit silly because the Oscars are far less important to the global economy.

Every multibillion-dollar energy company you can imagine will be at CERAWeek and the start-ups that will become multibillion-dollar energy companies in the future are there as well. If you want to understand what's trendy, you go to Davos. If you want to understand what's really happening, well, that's CERAWeek.

My guest today just got back from Davos, and I am looking forward to hearing about what's trending, but he is also prepping for CERAWeek, where he will spend the week leading panels with energy executives, senators, ambassadors and leaders in financial markets. Atul Arya is the Chief Energy Strategist at S&P Global and the host of the CERAWeek podcast. Atul, welcome to the Essential Podcast.

Atul Arya

It's terrific to be with you, Nathan, and thank you for that great introduction.

Nathan Hunt

Let's start with Davos. What were you hearing on the ground this year? Was there anything unexpected?

Atul Arya

Well, I would say the first thing is that you couldn't walk even 5 meters in Davos without some reference to generative AI. I've been going to Davos for a bit. And every year, there is something which becomes the big thing. Of course, last year, there was the Ukraine-Russia war. It was about a year, all at that time, but still very much in the minds of people. It was still there the war, but generative AI was the big thing this year in Davos. And a lot of enthusiasm, I would say, for generative AI being able to solve some of the very tricky problems we face, including climate change and energy transition.

Nathan Hunt

So Atul, I was, to be honest, a little perhaps unfairly dismissive of Davos in my introduction. I call it trendy. How sophisticated are the discussions you are hearing at Davos? Is there more depth, is there more substance in the private meetings that are happening behind the scene?

Atul Arya

Yes, you kind of put your finger on it because -- I mean, like every event, there is the event and there is everything else which happens outside the event, which is also actually true for CERAWeek to some extent. But in Davos, the big sessions with the heads of state and all of that happens in the Congress Center, but the real action is on the promenade where all the major companies take space and then organize both private and I would call invitation only sessions. And I went to many of them and very interesting.

I think generative AI, just to touch on that for 1 more minute, is clearly a game changer, and there's a lot of hope and enthusiasm. But I would say we are kind of on maybe Chapter 1 of the book or Chapter 1 on Page 2 of the book. So we have some ways to go. I should say there were many other conversations, and I because of my background, was quite a bit involved in climate and energy. And remember that you -- before Davos, there was COP28. So this was the first big gathering of people coming out of COP. So there was quite a lot of discussion about, okay, COP came up with these big agreements, how are we going to actually make them happen. Not very easy to say the least, right?

Nathan Hunt

Absolutely. You have been going to Davos for many years now. What has changed in the time you've been there?

Atul Arya

I think there are quite a few things, from small things to big things. Like, for example, back in 2004, '05, when I was with a different company, you could go to Davos and walk around very freely. There was security, but it wasn't like what it is now. Now you can't walk anywhere, and perhaps rightly so. I think the most remarkable change I see -- two changes. One is that in the old days, Davos used to be the CEOs and the top people, right?

And now you see a lot of younger people, lot of diversity in the participation. You see a lot of women, a lot of people from different parts of the world. And so that's a big, big change in the mix of participants. And what other thing I see is that many of the countries from what we call Global South or the developing world, now have pretty significant presence in Davos because they are trying to attract people.

For example -- I take one example of India. So there were India pavilions representing the different parts of the central government, but also state governments from India taking space. They know this is clearly a big focus for India to attract FDI, foreign direct investment into country and into the states. So that is a big change. You wouldn't have seen that even 5 years back, it wasn't the case. Big billboards with Prime Minister Modi's photos and all that.

And as I said earlier, younger people, which I think is very good because now you get a very different mix of the -- I went to some sessions, which are organized by like Fast Company, just to give you an example. And you get a very different feel sitting there than sitting in the Congress Center and having, still most of the conversation Congress Center is held by either politicians or CEOs of companies.

Nathan Hunt

That is fascinating to me. There was an editorial in the FT this week, where the person was being very critical of Davos and said, if you really want to understand how the world works today, you don't go to Davos, you don't go to a mountain top in Switzerland, you go to Dubai, which he was sort of setting up as sort of the center of commerce and trade. You've spent a lot of time in Dubai. You've obviously spent a lot of time in Davos. Where do you see the balance here?

Atul Arya

So I think I won't be as critical as what the FT Editorial said because I think all of these events have a place in the world. I mean there was -- before Dubai, there was FII, the event organized by the Saudi Department of Investment Fund. So -- and they all serve different purposes, right? So Dubai at least for this year was the COP, which was a much bigger event, a lot of important decisions. And that was -- the WEF is more selective in who goes there because of the cost involved and how the whole system works.

I think -- my feeling is that, and you kind of touched on it in the introduction, COP was a very kind of -- you had to ultimately get to some agreements. So there was a lot of kind of body contact to get things done. In Davos, there is no such thing because you're not getting anything -- there is no agreement coming out of. So this is more about setting the direction on big issues. And although people make a lot of fun about Davos and sometimes justified.

I think it's an important thing, particularly for the top leadership of the world to come together and discuss important issues and things happen as a result of that. So we shouldn't forget that. And then I think CERAWeek is quite different because CERAWeek is where things actually happen. As you said, we talk about the real stuff. We talk about what's going to happen to the energy system in the next decade. We talk about investments and the policies and innovation. So that's quite a different flavor, and all have a place in this kind of overall event world.

Nathan Hunt

Before we get to CERAWeek, I want to talk about your podcast. You've released 2 episodes since January began. It is quite an aggressive pace. You're outdoing us. Tell me about the discussions you've been having.

Atul Arya

Yes. So first of all, no competition here. And then you are the master, I'm still a pupil here. Our goal here is to, as you said, let's propagate at S&P, we have great opportunity to promote CERAWeek. And it's important for people to understand, particularly those who don't know CERAWeek. Although it's been around for over 45 years, so amazing thing. So we've talked about 2 things so far. One is Dan Yergin, who I think for most people may not need any introduction, one of the world's foremost energy historian and an energy expert is the person people listen to when they want to talk about energy. So he and I talked about the main themes of CERAWeek 2024.

And we have come with this idea of what we call multidimensional energy transition. I can come back to that in a minute as to what that means. But -- so we talked about that. We talked about what are some of the issues. And energy, we say is at the middle of a lot of challenging things right now, whether it's the Russia-Ukraine war or what's happening in the Middle East with the Houthis attacking the shipping lanes and the whole COP28 outcomes, how do we actually make them happen. So lots of energy discussions to be had.

The second one we talked much more granular about clean tech with my colleagues from the commodity insights team, and that was much more about how do we get clean tech into the -- how do we accelerate deployment of clean tech. One of the things which came out of COP28 was tripling of renewables by 2030. And my colleague on the podcast [indiscernible] actually, we have the hardware to do that, but getting it in the ground is not quite the same thing as having the hardware, right? So we are trying to -- and we will have more podcasts. We're going to try to give a bit of a feel for what we hope will come, expectations, setting the scene for CERAWeek.

Nathan Hunt

You can't talk about CERAWeek without talking about Dan Yergin, but I don't know quite how to describe Dan. I mean he's the Vice Chairman of S&P Global. He's this Pulitzer prize winning author. He's this expert in energy markets, but his role in energy markets is unique. How would you describe Dan and his influence and his reach in these important markets.

Atul Arya

Yes. So the first thing I should say is that -- I mean it's a real privilege for me, an honor to work with him. We talk pretty much every day and talk several times. Dan has a unique capability -- I mean he has multiple things, which he is great at, but he can distill some very complex issues into some simple messages, which even kind of the ordinary person who is not an expert can understand. And I think that's kind of the very special thing. Many people, I would say, cannot just do that. He also is very present in understanding how things will connect.

So if you go back -- I mean, he has written several books. The last book he wrote was about The New Map. And in The New Map, he highlighted some of the things which are happening now. And that came out 4 years back. So how he thought about the South China Sea, about the Middle East and also about Russia and how Russia was feeling very threatened actually -- has been for a while since the shale revolution started in the U.S. because see, before shale revolution in the U.S., there was -- U.S. was a big importer and now U.S. is energy superpower. In fact, as big or bigger than Russia. So that was something which Dan has been writing about with credibility.

I think the last thing I would say about Dan is that he is terrific with people. He's great with his time even for the younger people, junior people in the company and outside the company. He is mentoring a number of colleagues. So he is also a great teacher for all of us to learn what -- how -- and his interaction. I'm very fortunate that I got to be part of many of his interactions with the titans of industry, you can say that CEOs, ministers and he's very generous to allow others to come in and join that discussion and learn.

Nathan Hunt

You're 100% right. He's this amazing convenor of people. And when you go to CERAWeek and Dan is more often than not up there on the stage. His ability to talk to anyone across energy markets is amazing. He can talk to a regulator. He can talk to a senator. He can talk to the head of an oil company. And then he can talk to an environmental activist in the next session. And he is fair and creates time for all of these different perspectives. It's amazing to see.

Atul Arya

Yes. I think one thing I -- last thing to add here one, before we move on, Nathan, is that one thing I've learned from Dan is that he is one of the few people I know who is talking to you or me or anybody he meets, he will ask questions. Most people like to talk about themselves. But in case of Dan, he wants to talk to you about what's going on with you? What's going on in your life? Or what are you working on? What are some of the important issues?

And I think it's a great kind of ability to then absorb all of that, and that's kind of all there when -- as you mentioned, all those spectrum of people, so he can then pull it all together, that knowledge he has gathered by asking these questions. And we are very fortunate. And if you -- if you're audience, if you haven't been to CERAWeek, you should come, if nothing else just to see how all of this unravels day by day, hour by hour.

Nathan Hunt

I tried to describe CERAWeek in my introduction. I don't think I quite did it justice. I've been once -- I went last year. You've been there for years. How would you describe CERAWeek and why it matters as much as it does?

Atul Arya

Yes. So CERAWeek as our audience who have been there will know is that it used to be primarily an oil and gas kind of event, if you go back 20 years, right? Then it started to evolve, more power came in, more technology. And now I would call it is kind of a combination of energy, technology, finance and geopolitics, all mashed together. And it will be -- if I say it's a 3-ring circus, it will be a disservice because it's not a 3-ring, is like multiple rings happening. We have multiple sessions. And the main thing, I think, for us in CERAWeek at S&P Global, it's about content. We have terrific content.

One of the great attributes of CERAWeek is that we don't go and showcase what we do, which we do other places. But we go and hear what others have to say. So we are asking questions and absorbing from the CEO to the innovator to an young entrepreneur, the full spectrum. So that's the content. And the second thing of CERAWeek is the community. There are people who have been coming to CERAWeek for 30, 40 years, I mean since it started. And for them, it's kind of something they will never change in their calendar no matter what.

And the last thing is all about the community and the partnership we have across -- so people feel like we are part of a family. So you're coming in for the reunion. And the great thing about CERAWeek, one thing we're trying to do is, if you are new, it's like going to a place where you know nobody -- and you're standing around and saying, what the hell am I going to do here. We bring you in to say, well, please join this community, be part of the community, and it's a great place to build connections and learn, which is what CERAWeek is.

And all of this with many, many different topics and the sessions. This year, as always, we are always thinking about new things. So this year, we are also going to expand, for example, generative AI will be a big part of what we do besides everything else we have been doing for the last few years.

Nathan Hunt

One of the things I found fascinating when I was at CERAWeek last year is that it is almost like 2 interconnected conferences happening at the same time. So there are -- there's sort of -- the main area, it's in this hotel in Houston every March. And there's -- the main area where you have senators and you have heads of oil companies and you have these major government officials from around the world talking about what is happening with them.

And then you walk across, there's this glass bridge and everyone's walking back and forth the whole time. And on the other side, you have a conference where you have people developing new technologies, people developing green energy, people developing technological innovations. I remember -- and that area is called the Agora. And I remember hearing you interview someone from AWS last year in the Agora area. And then hearing you interview people in the main area. How do you tie those 2 together in your head?

Atul Arya

Yes. It's a terrific question. So it's like a conference within a conference. So what is happening in the hotel, Hilton Americas, is we have -- we call it executive conference. The focus there is much more about strategy and policy and government officials, as you say, a CEO is talking about what they're planning to do in their companies, geopolitics features prominently in that whole discussion.

Agora is much more about innovation and technology and really what is next kind of the thing. And people are -- is where you will see sort of younger people, and you will see slightly dress-down people. But it's a lot of fun. I think it's great. In terms of how I connect. So I'm an engineer by training, a petroleum engineer. I started in the upstream oil and gas. But I had the good fortune to work around many different parts of the industry. I ran strategy for a company for a little bit.

I had the fortune to go and work in a solar company. I was COO there and learned tremendously. I never kind of seen a customer before. So in my head, I see kind of my role in CERAWeek, besides helping to curate the program, is to connect, be the bridge, literally that glass bridge we were talking about between the two. How do we translate big strategic conversations, which I will again moderate a few of them with actually what are the technologies doing. So when I go to the Agora, my intent is to probe into, is your technology really ready? Is it going to really do something? What are some of the challenges, more and more human dimension to some of these things.

Whereas in the executive conferences, it will be about kind of, all right, you want to do this, okay, COP just happened, how does it impact your company's strategy? Are you going to change your investments? So -- and then they do connect, but it's sort of you have to create that bridge. And there are different bridges, by the way, depending upon the topics.

Nathan Hunt

What themes do you foresee might develop at the conference this year. And I -- what I mean by that is, 2 years ago, a lot of the discussion was about investment. And is the investment level right in order to meet the energy needs of the future. Last year, a great deal of excitement about the Inflation Reduction Act and the implications for green energy. What do you think the headline issue would be this year?

Atul Arya

I think there are several things, Nathan. I'll just talk about a couple. So one is that there were some very big agreements made among countries, not companies at COP, right? Tripling of renewables by 2030, as a doubling of energy efficiency by 2030, doubling of nuclear by 2050. So -- and many others, methane. We're going to see a lot of discussion around how does COP agreement translate into real action. We are going to see more on IRA, Inflation Reduction Act because it's now 1.5 years also sort of getting a bit older.

So how is it changing things? Is it keeping -- is it accelerating energy transition at least in the U.S.? A couple of other things. Investments, as you said, will remain a big theme. General feeling is that there isn't enough money going into an energy transition and particularly not enough money going into the Global South, which needs a lot more money in developing countries. We will talk about that.

And as part of the IRA, there were certain technologies which were targeted, CCS, I mean, carbon capture, hydrogen, storage, EV. So we're going to have a lot of in-depth discussion around how are these technologies progressing. And overlaying all of this, by the way, will be the geopolitical hangover because we have, I think, like, if I'm not mistaken, 50% of world's population is going to have elections this year. Already one has happened in Bangladesh. And India, U.S., U.K., I mean some of the very big democracies are going to have elections. So what will that mean for the energy and climate going into the future will also be a big part of the discussion at CERAWeek.

Nathan Hunt

Atul, speaking of the Global South, a lot of the countries we traditionally associate with being part of the Global South do tend to be energy exporters. And as such, they are at CERAWeek. Malaysia, a prominent presence at CERAWeek last year. A huge number of African countries have delegations. How much have you as an organizer, as one of the co-organizers of CERAWeek, how much are you consciously thinking about getting that representation into the conference and up on the stage.

Atul Arya

Yes, very much so. This is a big focus for me personally for multiple reasons. Actually, after Davos, I went to India for a few days before coming back because of certain engagements but also to connect with Indian company execs for them to come here. So I mentioned earlier, the theme of CERAWeek this year is multidimensional transition. And that really reflects the needs of the -- different needs of different parts of the world. So if we are living in the U.S. and Europe, Japan, our needs for -- our thinking on transition is very different because we don't have to worry about lack of electricity or lack of fuel. Whereas if you're living in Africa or even in India or other parts of.

Asia, access, affordability are very important for you, besides transition. So they -- at least interesting, many of these countries are at the forefront of climate change, but they also need to grow their economy. So at CERAWeek, we are very consciously going to focus on this whole idea that there are a different pace for different countries, different needs, different pathways, different technologies. My favorite example is if you go from burning wood to LPG in India or Africa, that's energy transition for roughly hundreds of millions of women mostly.

But most people in the West will not think about that because they are still using fossil fuel, right? So we want to expand the thinking on that, and you will see a lot of sessions around things like adaptation, around financing, business models, how do we get more funding into this Global South. We'll have a dinner focused around Global South. So we are very conscious.

And this is a broader fabric of what we in the U.S. call just energy transition, right? So just energy transition in the U.S. has a different meaning to what it has, say, in Africa or India or even Europe. So our goal is to expand that, again, create a bigger canvas for people to talk. Whatever our goals, Nathan, bigger goal is that can we bring different people with different views to CERAWeek. And then when they leave, they go with some ideas or some solutions to some really challenging problems around the world.

Nathan Hunt

So I know you guys are in the process of planning this massive conference right now. And I know that you will be up on stage throughout the week, doing interviews, moderating panels. Maybe you don't know exactly who you'll be interviewing yet. But who are you looking forward to talking to at CERAWeek this year, whether or not it's on stage or it's at a dinner or just an informal conversation, who are you excited to reconnect with?

Atul Arya

So we are still, as I said, still in the kind of construction phase of our program as we formally call, and like a multidimensional puzzle to do all of that. I think there are a number of -- I can talk about specific names, but what I'm very interested to talk about, first of all, I want to hear from companies in Europe as to how it's going in terms of -- it seems like we have now come to some sort of, I wouldn't say stabilization, but at least versus Ukraine-Russia issue to see how the energy flows are happening there. I'm quite keen on that.

I'm very keen to talk to people from DOE, people like Jigar Shah and David Crane, IRA. And of course, they have a lot of money to spend. There could be a change in administration. So how are they thinking about that. I want to talk with the mining industry because that's going to be critical for all the critical minerals issue, but nobody loves mining industry. I met the CEO of Vale a few weeks back. Actually I met him in Davos last week, and he was talking about the fact that their Ps like 4 price to earnings ratio, people don't want to invest in mining, but they want mining to deliver all kind of stuff.

So it would be very interesting to hear from them. I want to talk to my oil and gas industry colleagues as to going from an international oil company to an integrated energy company. How is that going? I mean, I have my own views, but I'm interested to hear from them. And by the way, I just saw this morning that China installed more solar last year than all the solar we have in the U.S. Think about it. So we are hoping to gather Chinese solar -- one the largest Chinese solar company I met in Dubai to say, "Hey, how are you doing that?" I mean it's just unbelievable, right? So no shortage of great conversations to be had at CERAWeek.

Nathan Hunt

Absolutely. Well, I am looking forward to it again this year. Atul Arya, thank you so much for joining us on the podcast, and we will include the link to your amazing podcast in the show notes.

Atul Arya

Thank you for inviting me, and I look forward to seeing you in Houston, if not sooner. Thank you, Nathan.

Nathan Hunt

The Essential Podcast is produced by Patrick Moroney. At S&P Global, we accelerate progress in the world by providing intelligence that is essential for companies, governments and individuals to make decisions with conviction. From the majestic heights of 55 Water Street in Manhattan, I am Nathan Hunt. Thank you for listening.

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